PLAINTIFF’S SUPPLEMENTAL BRIEF · MTD, ECF 11-1 at 10; Defs.’ Reply in Support of MTD, ECF 33...

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

STATE OF MARYLAND,

Plaintiff, v. UNITED STATES OF AMERICA, et al.,

Defendants.

* * * * *

Case No.: 1:18-cv-2849-ELH

* * * * * * * * * * * * *

PLAINTIFF’S SUPPLEMENTAL BRIEF

Case 1:18-cv-02849-ELH Document 40 Filed 12/18/18 of 16

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TABLE OF CONTENTS

TABLE OF AUTHORITIES ............................................................................................... ii

PLAINTIFF’S SUPPLEMENTAL BRIEF ......................................................................... 1

I. THE TEXAS DECISION REINFORCES MARYLAND’S STANDING. ..................................... 3

A. The Texas Decision Reinforces the Plausibility of Maryland’s Non-Enforcement Allegations. ......................................................................................... 3

B. Defendants Cannot Contradict the Complaint with Extra-Record Evidence on a Motion to Dismiss............................................................................................. 6

II. RECENT DEVELOPMENTS ALSO ADD SUPPORT TO MARYLAND’S REQUEST FOR A

PRELIMINARY INJUNCTION AGAINST MATTHEW WHITAKER. ....................................... 9

CONCLUSION ................................................................................................................. 12


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TABLE OF AUTHORITIES

Cases

Am. Humanist Ass’n v. Greenville Cty. Sch. Dist., 652 F. App’x 224 (4th Cir. 2016) .................................................................................. 11

Burgess v. FDIC, 871 F.3d 297 (5th Cir. 2017) ......................................................................................... 11

Duka v. SEC, 2015 WL 5547463 (S.D.N.Y. Sept. 17, 2015) .............................................................. 11

EQT Prod. Co. v. Wender, 870 F.3d 322 (4th Cir. 2017) ........................................................................................... 8

Florida ex rel. Bondi v. U.S. Dep’t of Health & Human Servs., 780 F. Supp. 2d 1307 (N.D. Fla. 2011) ........................................................................... 5

Ironridge Glob. IV, Ltd. v. SEC, 146 F. Supp. 3d 1294 (N.D. Ga. 2015) ......................................................................... 11

Landry v. FDIC, 204 F.3d 1125 (D.C. Cir. 2000) .................................................................................... 11

Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139 (2010) ........................................................................................................ 8

Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978) ...................................................................................................... 10

Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568 (1985) ........................................................................................................ 8

United States v. Eaton, 169 U.S. 331 (1898) ...................................................................................................... 12

Constitutional Provisions

U.S. Const. art. III .............................................................................................................. 11

Statutes

42 U.S.C. § 300gg-22(b)(2)(F)(i) ...................................................................................... 10


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PLAINTIFF’S SUPPLEMENTAL BRIEF

As the Court is aware, the District Court for the Northern District of Texas has

issued an order entering partial summary judgment in favor of the plaintiffs in that case.

Specifically, the Court issued a declaratory judgment that “the Individual Mandate, 26

U.S.C. § 5000A(a) [is] UNCONSTITUTIONAL” and that “the remaining provisions of

the ACA, Pub. L. 111-148, are INSEVERABLE and therefore INVALID.” Slip op. 55,

ECF 35-1 (emphasis in original). The District Court in Texas has now ordered expedited

briefing—to conclude on December 26—on the effect of its decision. Order to Expedite

Briefing, Texas v. United States, No. 18-cv-167 (N.D. Tex. Dec. 18, 2018) (ECF 215).

This development substantially reinforces Maryland’s standing in this case.

Although the Texas court withheld injunctive relief for the time being, that appears simply

to reflect the Administration’s representation that it would comply with any declaratory

relief.

In light of that promise, and the other evidence cited in the Complaint, Maryland

has more than plausibly alleged that Defendants will continue to maintain that the ACA is

unconstitutional, including in foreseeable third-party actions seeking to leverage the Texas

partial judgment into injunctions, and cease enforcing critical portions (or all) of the ACA

after January 1, causing multiple injuries to the State. The Texas court has further indicated

its intent to move promptly to ruling on the remaining request for injunctive relief (see

Order, Texas v. United States, No. 18-cv-167 (N.D. Tex. Dec. 16, 2018) (ECF 212)), a

process that may be expedited if the court perceives that the Administration is not keeping

its promise to abide by the declaratory judgment alone.


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If doubt remains, and if the Court believes that the status of the Texas litigation is

essential to Maryland’s standing, the Court can and should deny the Motion to Dismiss

with leave for the Defendants’ to renew it at a later date. That is commonplace. The

opposite course—dismissing the case—would be unsound because even if the Government

represents that it intends to enforce the statute now, that could easily change in the wake

of later developments in Texas, including the Texas court’s response to a pending motion

to clarify its order by stating that it intended the judgment to take immediate effect.* To

the extent Defendants seek to contradict the Complaint’s allegation of impending non-

enforcement by pointing to evidence outside the Complaint (all of which is unsworn,

ambiguous, and untested), it lacks the right to do so through its present motion to dismiss.

Requiring Defendants to present the Administration’s enforcement plans through

competent evidence in a summary judgment (or other appropriate) motion has the practical

benefit of allowing the Court to decide the relevance of the Texas litigation after the dust

has settled.

The Texas decision also supports Maryland’s standing to secure a preliminary

injunction against Matthew Whitaker’s assumption of the powers of the office of the

Attorney General. The State faces a present redressable injury from Mr. Whitaker’s

involvement in the federal government’s ongoing—or just concluded—decisionmaking on

* See Mot. for Clarification at 2, Texas v. United States, No. 18-cv-167 (N.D. Tex.

Dec. 17, 2018) (ECF 213) (requesting clarification whether court intended declaratory judgment to take effect only after completion of appeals or immediately) (Attachment 1 to this filing).


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how to respond to the Texas decision, including whether the Department of Justice will

collaborate in continued enforcement of the ACA pending any appeal in that case.

Although Defendants have previously tried to cast doubt on the extent of Mr. Whitaker’s

involvement in matters relevant to this litigation, they cannot plausibly deny that he will

play a material role in the formulation of the Government’s response to the Texas order,

with inevitable effects on this case. That is a basis for this Court to decide the lawfulness

of Mr. Whitaker’s appointment, wholly apart from its determination whether the State has

standing to seek relief from Defendants’ impending non-enforcement of the ACA. The

Court should not allow the Government to avoid a ruling on the appointment by remaining

coy and ambiguous about Mr. Whitaker’s involvement. It should advise the Court if he is

involved. If it declines or there are remaining questions, Maryland should be entitled to

take limited jurisdictional discovery on the question of Mr. Whitaker’s involvement.

Finally, this Court can address Mr. Whitaker’s appointment through the exercise of its

inherent power to supervise this litigation without first having to decide whether Maryland

has standing in the underlying suit.

I. THE TEXAS DECISION REINFORCES MARYLAND’S STANDING.

A. The Texas Decision Reinforces the Plausibility of Maryland’s Non-Enforcement Allegations.

The Texas decision substantially undermines Defendants’ objection that the State

can only speculate about whether Defendants will continue to enforce the ACA in full after

January 1, 2019. Among other things, Defendants had argued that there was no way to

know how the Texas court would rule or how the Administration would respond to that


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decision. See Defs.’ MTD, ECF 11-1 at 10; Defs.’ Reply in Support of MTD, ECF 33 at

4-7. That argument was meritless when made, see Pl.’s Opp. to MTD, ECF 27 at 5-8, 17-

18, but has at any rate been overtaken by events. The Texas court has now issued its

declaratory judgment, stating that the entirety of the ACA is unenforceable.

Although the Texas court did not immediately order the federal government to cease

enforcement of the ACA, that does not undermine Maryland’s standing—the court appears

to have withheld injunctive relief because the Government represented that it was

unnecessary, given the presumption that the Government would comply with the

declaration. Slip op. 12; see also Am. Compl., ECF 8 ¶ 10 (describing Administration’s

representations to Texas court); Pl.’s Opp. to MTD 2. In particular, Deputy Assistant

Attorney General Shumate told the Texas court:

MR. SHUMATE: . . . . We think a declaratory judgment would be sufficient relief against the Government, and the Court wouldn’t need to enter any type of judgment.

THE COURT: And why is that?

MR. SHUMATE: I think it’s the Florida district court in the original ACA case only entered a declaratory judgment. The Court wouldn’t need to enter an injunction. I think courts have said a declaratory judgment against the government is ordinarily sufficient relief; it operates in a similar manner as an injunction.

THE COURT: Because you’re presumed to comply with –

MR. SHUMATE: The government is presumed to comply with the law, and the Court will then have a definitive interpretation of the statute that would advise the public about their legal obligations.

THE COURT: Thank you.


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Tr. Hearing on Mot. for Prelim. Inj. at 103-04, Texas v. United States, No. 18-cv-167 (N.D.

Tex. Sept. 5, 2018) (emphasis added). The Defendants’ reference to the Florida litigation

was significant, and the Texas District Court would have recognized it as such. In that

original ACA case, the court held that the declaratory judgment immediately bound the

federal government to stop enforcing the statute. See Florida ex rel. Bondi v. U.S. Dep’t

of Health & Human Servs., 780 F. Supp. 2d 1307, 1316 (N.D. Fla. 2011) (“For the

defendants to suggest that they were entitled (or that in the weeks after my order was issued

they thought they might be entitled) to basically ignore my declaratory judgment until ‘after

appellate review is exhausted’ is unsupported in the law.”). In limiting its order to

declaratory relief, it appears the Texas court specifically relied on the Government’s

representation that an injunction was unnecessary in light of the precedent of that prior

ACA litigation. See slip op. 12.

It is therefore entirely plausible—at the very least—for Maryland to allege that the

Administration will keep its word to the Texas court and abide by the declaration that the

statute is invalid and unenforceable. If the Administration does so, there can be no genuine

question that Maryland will be injured. As the State pointed out in its opposition, and

Defendants did not contest, Maryland is entitled to millions of dollars in direct payments

each year under provisions of the statute the Texas court has now ruled invalid and that the

United States would stop making the payments if it did not enforce the statute. See Am.

Compl. ¶ 5; Pl.’s Opp. to MTD 9.

Even if the Administration complies with the Texas judgment only with respect to

the unenforceability of the provisions regarding pre-existing conditions, those actions


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would directly injure Maryland in multiple ways, as described in the State’s opposition.

Pl.’s Opp. to MTD 9-16. Defendants have responded by arguing that Maryland can avoid

some of those injuries by enforcing the ACA itself, at its own expense. Defs.’ Reply in

Support of MTD 8-9. The State has explained why that argument fails on its own terms.

Pl.’s Opp. to MTD 10-11. But the Texas decision now makes even more important

Defendants’ refusal to say whether the Administration would permit Maryland to continue

that enforcement role if the State attempted to enforce provisions of the statute now held

invalid by the Texas court, including provisions Defendants themselves have told Congress

they believe to be unenforceable. See id. at 11 n.5; Defs.’ Reply in Support of MTD 8-9

(failing to address question).

The Administration also has given no answer as to how Maryland is supposed to

avoid the injuries caused by disruption in markets it does not regulate, such as those of

other States and ERISA plans. That silence is particularly damning because the

Administration’s support for the Texas court’s invalidation of central ACA protections

could well embolden insurers to defy the statute’s expansive protections for those with pre-

existing conditions, knowing that Defendants will not defend the statute’s validity or

attempt their own enforcement efforts, making it more likely the State will have to expend

resources attempting to enforce the ACA on its own or enacting replacement protections.

B. Defendants Cannot Contradict the Complaint with Extra-Record Evidence on a Motion to Dismiss.

In their briefing, and as previewed in the recent status conference with the Court,

Defendants have attempted to rebut the reasonable inferences drawn from the factual


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allegations of the Complaint by pointing to informal statements made by various

administration officials outside the context of this litigation. But as Maryland noted in its

opposition, if Defendants wish the Court to decide their motion on the basis of evidence

outside the Complaint, they were required to submit that evidence in competent form (i.e.,

through declarations, rather than press releases) and ask this Court to resolve the factual

disputes through the proper adversarial process. See Pl.’s Opp. to MTD 5 n.2. Because

Defendants have forgone that opportunity, and because the Complaint plausibly alleges

that Defendants will cease enforcement, including in light of the decision the Texas court

has since rendered, the Court should simply deny the present motion to dismiss.

This point is no mere technicality. If the Administration has decided it will continue

to enforce the ACA in full, despite its representations to the Texas court, Maryland and this

Court are entitled to know the details of that decision, presented through competent

evidence subject to testing through the normal adversarial process. That process is

important because the details matter. For example, it would be important to know whether

the Administration would continue to allow States, like Maryland, to enforce provisions

(like the pre-existing conditions protections) the Administration believes to be

unenforceable, as the Texas court has held, and what the Administration would do if third

parties challenge such enforcement using the Administration’s own arguments.

Moreover, a simple statement of the Administration’s present enforcement plans

would be insufficient. Any such statement may be premised on the uncertain assumption

that the Texas court did not intend for its declaration to take effect until appeals have been

exhausted. The intervenor defendants in that litigation have requested clarification on this


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score. If the court follows the precedent from the original ACA litigation that the

Administration cited to that court, the Administration may well decide to comply with the

decision starting January 1.

Applying the normal procedural rules governing a motion to dismiss thus has very

real practical benefits. It would allow the Court to consider the relevance of the Texas

litigation after the Texas court has ruled on the pending motion for clarification, and likely

after any stay motions have been resolved (by the district court or on appeal).

In any event, the present uncertainty over the Administration’s enforcement plans

itself will cause Maryland harm, forcing the State to expend resources to plan, during the

annual budget-setting process that is currently ongoing, and the upcoming legislative

session, for the very real possibility that Defendants will refuse to enforce the statute. See

Pl.’s Opp. to MTD 15-16; see also, e.g., Monsanto Co. v. Geertson Seed Farms, 561 U.S.

139, 153-55 (2010) (where there was a “reasonable probability” that plaintiffs would be

injured by Government’s failure to regulate third parties, expense of measures taken to

mitigate that potential harm created an injury-in-fact); Thomas v. Union Carbide Agric.

Prods. Co., 473 U.S. 568, 581-82 (1985) (suit seeking declaration regarding arbitration

scheme’s constitutionality found ripe where the plaintiff “suffers the continuing

uncertainty and expense of depending for compensation on a process whose authority is

undermined because its constitutionality is in question”); EQT Prod. Co. v. Wender, 870

F.3d 322, 330-31 (4th Cir. 2017) (plaintiff had standing to seek declaration regarding

whether ordinance validly applied to its storage of wastewater because if the provision

applied, plaintiff would be required to alter its operations “and such a change would impose


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additional costs,” which was “enough to give rise to an Article III injury in fact”).

Particularly given the lead time necessary to implement responsive measures, the State has

a critical need for declaratory relief in the near term.

II. RECENT DEVELOPMENTS ALSO ADD SUPPORT TO MARYLAND’S REQUEST FOR

A PRELIMINARY INJUNCTION AGAINST MATTHEW WHITAKER.

The ruling of the Texas court also substantially strengthens Maryland’s argument

that it may seek—and the Court should issue—an Order prohibiting Matthew Whitaker

from participating in the proceedings—including with respect to the determination whether

the United States will enforce the ACA. Importantly, these events also make clear that

Maryland’s standing to raise this challenge is independent of its standing to seek relief

from Defendants’ impending non-enforcement of the ACA.

There is no dispute that the Government is presently required to decide how to

respond to the Texas court decision, including whether to continue enforcing the ACA (and

if so, what parts and in what jurisdictions), whether to appeal the decision, and what

position to take with respect to any appeal undertaken by others. Those decisions will

indisputably affect Maryland’s interests. And there should be no dispute that Mr. Whitaker

has been (or will be) involved in those decisions. It is implausible that the Acting Attorney

General would not personally play a role in deciding how the United States will respond to

the Texas court’s ruling that the ACA in its entirety is unconstitutional—a decision that

goes beyond the Department of Justice’s view that substantial portions need be struck. As

the Government asserted during the teleconference with the Court on December 17, 2018,

“a lot of vetting” is going on and the U.S. Government has “to work through” how to


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respond to the Texas court’s ruling, in coordination with all relevant agencies. Going

forward, Mr. Whitaker will be involved in advising the President on the obligations of the

United States in the wake of the Texas court’s declaratory judgment and participate in

policymaking in light of the Department of Justice’s own role in enforcing the statute. See

42 U.S.C. § 300gg-22(b)(2)(F)(i). Contra Defs.’ Reply in Support of MTD 6 (asserting

that it has no such role). That decision on how the United States will proceed will

inevitably be made in consultation with the White House and, possibly, with the

Departments of Health and Human Services and Labor, and the Internal Revenue Service.

Such cabinet-level decisions are not delegated entirely to subordinates. Even if they are,

that is itself a concrete decision by Mr. Whitaker, whereas a properly appointed Acting

Attorney General easily could determine to be involved personally.

If Defendants wish to make a factual dispute over Mr. Whitaker’s involvement,

which goes directly to the State’s standing to enjoin him, they cannot remain ambiguous

or silent. They should straightforwardly advise the Court of his involvement. Of note, in

proceedings on Mr. Whitaker’s appointment in the District Court for the District of

Columbia, Defendants last night advised the Court that Mr. Whitaker was recused in an

attempt to defeat the plaintiff’s claim. See Defs.’ Status Report at 2, Michaels v. Whitaker,

No. 18-cv-2906 (D.D.C. Dec. 17, 2018) (ECF 21). There is thus no basis for Defendants

to withhold that information in this case—using it as a sword in one proceeding and a shield

here. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 n.13 (1978) (when “issues

arise as to jurisdiction or venue, discovery is available to ascertain the facts bearing on such

issues”); e.g., Am. Humanist Ass’n v. Greenville Cty. Sch. Dist., 652 F. App’x 224, 230


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(4th Cir. 2016) (“On remand, the court should conduct jurisdictional discovery to

determine whether AHA currently maintains standing to pursue this claim . . . .”).

Importantly, and contrary to the Defendants’ assumption, this Court’s authority to address

Mr. Whitaker’s appointment is not dependent on an antecedent determination that the

Plaintiff has Article III standing to bring its underlying claims relating to enforcement of

the ACA.

First, Mr. Whitaker’s involvement in the federal Government’s decisionmaking

regarding whether to continue to enforce the ACA after the Texas decision independently

creates the kind of injury courts have found sufficient to establish standing in cases

like Landry v. FDIC, 204 F.3d 1125 (D.C. Cir. 2000). See, e.g., Burgess v. FDIC, 871 F.3d

297, 304 (5th Cir. 2017); Ironridge Glob. IV, Ltd. v. SEC, 146 F. Supp. 3d 1294, 1317

(N.D. Ga. 2015); Duka v. SEC, 2015 WL 5547463, at *21 (S.D.N.Y. Sept. 17,

2015). Indeed, a plaintiff need not show that an unlawful official made any particular

decision at all. In Landry, the D.C. Circuit found that even the recommendation of an

unconstitutional official—not a decision—was enough to “taint the ultimate judgment” of

the ultimate constitutional decisionmaker, even though that recommendation was subject

to de novo review by a proper officer higher up the chain. Landry, 204 F.3d at 1132. There

was a superior (and lawful) authority that decided the issue on de novo review, so the

unconstitutional actor functionally did not have authority over the plaintiff at all. Yet the

court still found that the plaintiff had standing to bring the claim. Id. Here, of course, the

order of authority is reversed—Mr. Whitaker is the ultimate decisionmaker, so Plaintiff’s

injury is even more direct. Cf. id. at 1331 (“clear causal link to a party’s harm” not required


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to establish standing for Appointments Clause challenge; rather, injury may be “radically

attenuated”).

Second, the Court unquestionably has the authority to act under its inherent

authority over the proceedings before it. Pl.’s Reply in Support of Mot. for PI, ECF 31 at

2-3. Notably, the Government has stressed a court’s inherent authority in the proceedings

in the District Court for the District of Columbia. The United States’ determination of its

position is directly related to the proceedings in this Court—as is clear from the

Defendants’ attorneys’ representation that they need that determination to conclude before

advising the Court of their position.

Finally, Plaintiff wishes to bring the Court’s attention to the arguments made in the

Michaels litigation. The plaintiff in that case elaborated on the challenge under the

Supreme Court’s decision in United States v. Eaton, 169 U.S. 331 (1898), explaining that

Mr. Whitaker is serving as a “principal officer” because he does not ever fill in for the

Attorney General on a temporary basis as a subordinate. The short discussion of that issue

from the briefing in that case is attached, so that the Court may consider the point. See

Attachment 2.

CONCLUSION

For the foregoing reasons, the Court should deny Defendants’ motion to dismiss.

Moreover, the Court should grant Maryland’s motion for preliminary injunction against

Mr. Whitaker. In the alternative, the Court should exercise its authority over these

proceedings to prohibit Mr. Whitaker from any involvement in the case and to substitute

Rod J. Rosenstein as defendant.


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Dated: December 18, 2018 Respectfully submitted,

THE STATE OF MARYLAND By: /s/ Kevin K. Russell

BRIAN E. FROSH Attorney General of Maryland JULIA DOYLE BERNHARDT (BAR NO. 25300) [email protected] STEVEN M. SULLIVAN (BAR NO. 24930) [email protected] SARAH W. RICE (BAR NO. 29113) [email protected] KIMBERLY S. CAMMARATA (BAR NO. 11997) [email protected] Assistant Attorneys General 200 St. Paul Place Baltimore, Maryland 21202 (410) 576-6325 (phone) (410) 576-6955 (fax) THOMAS C. GOLDSTEIN (BAR NO. 13618) [email protected] KEVIN K. RUSSELL (BAR NO. 20712) [email protected] SARAH E. HARRINGTON (BAR NO. 20701) [email protected] TEJINDER SINGH (BAR NO. 17888) [email protected] DANIEL WOOFTER (BAR NO. 20474) [email protected] Goldstein & Russell, P.C. 7475 Wisconsin Ave. Suite 850 Bethesda, MD 20814 (202) 362-0636 (phone) (866) 574-2033 (fax) Attorneys for the State of Maryland


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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

TEXAS, WISCONSIN, ALABAMA, ARKANSAS, ARIZONA, FLORIDA, GEORGIA, INDIANA, KANSAS, LOUISIANA, PAUL LePAGE, Governor of Maine, Governor Phil Bryant of the State of MISSISSIPPI, MISSOURI, NEBRASKA, NORTH DAKOTA, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, UTAH, WEST VIRGINIA, NEILL HURLEY, and JOHN NANTZ,

Plaintiffs,

v.

UNITED STATES OF AMERICA, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, ALEX AZAR, in his Official Capacity as SECRETARY OF HEALTH AND HUMAN SERVICES, UNITED STATES INTERNAL REVENUE SERVICE, and DAVID J. KAUTTER, in his Official Capacity as Acting COMMISSIONER OF INTERNAL REVENUE,

Defendants.

Civil Action No. 4:18-cv-00167-O

CALIFORNIA, CONNECTICUT, DISTRICT OF COLUMBIA, DELAWARE, HAWAII, ILLINOIS, KENTUCKY, MASSACHUSETTS, MINNESOTA by and through its Department of Commerce, NEW JERSEY, NEW YORK, NORTH CAROLINA, OREGON, RHODE ISLAND, VERMONT, VIRGINIA, and WASHINGTON,

Intervenor-Defendants.

INTERVENOR-DEFENDANTS’ (1) MOTION FOR EXPEDITED

CONSIDERATION, (2) CLARIFICATION OR STAY, AND (3)

ENTRY OF PARTIAL FINAL JUDGMENT UNDER RULE 54(b) OR

CERTIFICATION UNDER 28 U.S.C. § 1292(b)

Case 4:18-cv-00167-O Document 213 Filed 12/17/18 Page 1 of 7 PageID 2613Case 1:18-cv-02849-ELH Document 40-1 Filed 12/18/18 Page 1 of 7

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The Intervenor-Defendants the States of California, Connecticut, Delaware, Hawaii,

Illinois, Kentucky, Massachusetts, Minnesota, New Jersey, New York, North Carolina,

Oregon, Rhode Island, Vermont, Virginia, and Washington, and the District of Columbia

respectfully move this Court for:

(1) Expedited consideration of this Motion because the Defendant States and the

public will be irreparably injured absent an immediate clarification or stay.

(2) An order clarifying that the December 14, 2018 Order (ECF No. 211) does not

relieve the parties to this litigation—or any other State, entity, or individual—

of their rights and obligations under the Patient Protection and Affordable

Care Act (ACA) until appellate review is complete; or, in the alternative, an

order staying the effect of the December 14, 2018 Order (ECF No. 211)

pending appeal; and

(3) An order directing the entry of a partial final judgment under Federal Rule of

Civil Procedure 54(b), in accordance with the terms of the Court’s December

14, 2018 Order, or, in the alternative, an order certifying the Court’s

December 14, 2018 Order (ECF No. 211) for interlocutory appeal under 28

U.S.C. § 1292(b).

The Defendant States specifically request that the Court expedite consideration of

the Motion and issue a ruling by December 21, 2018, in order to avoid extraordinary

disruption prior to January 1, 2019, the date upon which this Court has held the entirety

of the Patient Protection and Affordable Care Act becomes unconstitutional. Moreover,

it is in the interest of the parties and the nation to efficiently and expeditiously achieve

appellate resolution of the important legal questions presented in this case.

In support of this motion, the Defendant States rely on their accompanying Brief. A

proposed order is attached.

/ / /

/ / /

/ / /


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Dated: December 17, 2018

Respectfully submitted, Xavier Becerra Attorney General of California Julie Weng-Gutierrez Senior Assistant Attorney General Kathleen Boergers Supervising Deputy Attorney General /s/ Neli N. Palma Neli N. Palma Nimrod P. Elias Deputy Attorneys General California State Bar No. 203374 California State Bar No. 251634 1300 I Street, Suite 125 P.O. Box 944255 Sacramento, CA 94244-2550 Telephone: (916) 210-7522 Fax: (916) 322-8288 E-mail: [email protected]

Attorneys for Intervenors-Defendants GEORGE JEPSEN Attorney General of Connecticut JOSEPH RUBIN Associate Attorney General Attorneys for Intervenor-Defendant the State of Connecticut MATTHEW P. DENN Attorney General of Delaware ILONA KIRSHON Deputy State Solicitor JESSICA M. WILLEY DAVID J. LYONS Deputy Attorneys General Attorneys for Intervenor-Defendant the State of Delaware RUSSELL A. SUZUKI Attorney General of Hawaii ANDREA A. SUZUKI Deputy Attorney General ROBERT T. NAKATSUJI Deputy Solicitor General Attorneys for Intervenor-Defendant the State of Hawaii


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LISA MADIGAN Attorney General of Illinois David F. Buysse Deputy Chief, Public Interest Division Anna P. Crane Public Interest Counsel Matthew V. Chimienti Assistant Attorney General, Special Litigation Bureau Attorneys for Intervenor-Defendant the State of Illinois ANDY BESHEAR Attorney General of Kentucky LA TASHA BUCKNER Executive Director, Office of Civil and Environmental Law S. TRAVIS MAYO TAYLOR PAYNE Assistant Attorneys General Attorneys for Intervenor-Defendant the Commonwealth of Kentucky

MAURA HEALEY Attorney General of Massachusetts STEPHEN P. VOGEL Assistant Attorney General Attorneys for Intervenor-Defendant the Commonwealth of Massachusetts

OFFICE OF THE ATTORNEY GENERAL State of Minnesota SCOTT IKEDA Assistant Attorney General Attorneys for Intervenor-Defendant the State of Minnesota by and through its Department of Commerce GURBIR S. GREWAL Attorney General of New Jersey JEREMY M. FEIGENBAUM Assistant Attorney General ANGELA JUNEAU BEZER Deputy Attorney General Attorneys for Intervenor-Defendant the State of New Jersey


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BARBARA D. UNDERWOOD Acting Attorney General of New York STEVEN C. WU Deputy Solicitor General LISA LANDAU Bureau Chief, Health Care Bureau ELIZABETH CHESLER Assistant Attorney General, Health Care Bureau Attorneys for Intervenor-Defendant the State of New York JOSHUA H. STEIN Attorney General of North Carolina SRIPRIYA NARASIMHAN Deputy General Counsel Attorneys for Intervenor-Defendant the State of North Carolina ELLEN F. ROSENBLUM Attorney General of Oregon HENRY KANTOR Special Counsel to the Attorney General SCOTT KAPLAN Assistant Attorney General Attorneys for Intervenor-Defendant the State of Oregon PETER KILMARTIN Attorney General of Rhode Island MICHAEL W. FIELD Assistant Attorney General MARIA R. LENZ Special Assistant Attorney General Attorneys for Intervenor-Defendant the State of Rhode Island THOMAS J. DONOVAN, JR. Attorney General of Vermont BENJAMIN D. BATTLES Solicitor General Attorneys for Intervenor-Defendant the State of Vermont MARK R. HERRING Attorney General of Virginia TOBY J. HEYTENS Solicitor General MATTHEW R. MCGUIRE Deputy Solicitor General Attorneys for Intervenor-Defendant the Commonwealth of Virginia


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ROBERT W. FERGUSON Attorney General of Washington JEFFREY G. RUPERT Chief, Complex Litigation Division JEFFREY T. SPRUNG Assistant Attorney General Attorneys for Intervenor-Defendant the State of Washington KARL A. RACINE Attorney General for the District of Columbia ROBYN R. BENDER Deputy Attorney General VALERIE M. NANNERY Assistant Attorney General Attorneys for Intervenor-Defendant the District of Columbia


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CERTIFICATE OF CONFERENCE

Counsel for movants conferred by telephone call on December 17, 2018, with

counsel to Federal Defendants and counsel to Plaintiffs regarding the relief sought in this

motion. The parties represented that they are still assessing the Court’s Order and cannot

yet take a position on the relief that is being requested.

/s/ Neli N. Palma

CERTIFICATE OF SERVICE

On December 17, 2018, I electronically submitted the foregoing document with the

clerk of court for the U.S. District Court, Northern District of Texas, using the electronic

case filing system of the court. I hereby certify that I have served all counsel and/or pro

se parties of record electronically or by another manner authorized by Federal Rule of

Civil Procedure 5 (b)(2).

/s/ Ashley Harrison_


IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

BARRY MICHAELS,

Plaintiff, v. MATTHEW G. WHITAKER, IN HIS OFFICIAL CAPACITY,

Defendant.

* * * * * * * *

Case No. 18-cv-2906

* * * * * * * * * * * * *

MEMORANDUM IN SUPPORT OF PLAINTIFF’S EMERGENCY MOTION FOR PRELIMINARY INJUNCTION

Case 1:18-cv-02906 Document 2-2 Filed 12/11/18 Page 1 of 36Case 1:18-cv-02849-ELH Document 40-2 Filed 12/18/18 Page 1 of 9

4

non-confirmed employees rather than the Senate-confirmed officials designated by Congress.1 In

fact, the President’s appointment of Mr. Whitaker violated the Constitution’s Appointments

Clause. At the very least, the appointment raises significant constitutional doubt that can be

avoided by holding that the appointment was not authorized by the Vacancies Act.

I. The President’s Appointment of Matthew Whitaker Violated the Appointments Clause.

A. The Appointments Clause Requires That the Senate Confirm an Officer Who Exercises the Authority of a Principal Officer And (1) Is Not a Subordinate or (2) Was Not Appointed In Response to “Temporary and Special Conditions.”

The requirement of the Appointments Clause that the Senate confirm a principal officer is

essential to the separation of powers. Freytag v. Comm’r, 501 U.S. 868, 882 (1991). In particular,

“Advice and Consent . . . . serves both to curb Executive abuses of the appointment power and ‘to

promote a judicious choice of [persons] for filling the offices of the union.’” Edmond v. United

States, 520 U.S. 651, 659-60 (1997) (quoting The Federalist No. 76, at 386-87, internal citations

omitted). Particularly prescient to these events, “[t]he ‘manipulation of official appointments’ had

long been one of the American revolutionary generation’s greatest grievances against executive

power, because the power of appointment to offices was deemed the most insidious and powerful

weapon of eighteenth century despotism.” Freytag, 501 U.S. at 883 (quoting G. Wood, The

Creation of the American Republic 1776-1787, at 79 (1969)).

The Supreme Court addressed the circumstances in which a government official is a

“principal officer” in Edmond. There, the Court held that members of the Coast Guard Court of

1 See, e.g., 10 U.S.C. § 132(b) (automatic succession by Deputy Secretary of Defense); 10 U.S.C. § 154(d) (Vice Chairman of Joint Chiefs of Staff); 50 U.S.C. § 3026(a) (Principal Deputy Director of National Intelligence).


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Criminal Appeals were “inferior,” not “principal” officers. It reasoned: “Whether one is an

‘inferior’ officer depends on whether he has a superior,” id. at 662, explaining:

[I]n the context of a Clause designed to preserve political accountability relative to important Government assignments, we think it evident that “inferior officers” are officers whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.

Id. at 663. The Court explained that its holding was supported by “the views of the first Congress,”

which created the second-in-command position of “Chief Clerk” to the Secretaries of State and

War. The Chief Clerk exercised significant authority within those departments but was designated

as an “inferior officer” who reported directly to, and was removable by, the Secretary. Id. at 663-

64.

The Court in Edmond identified United States v. Eaton, 169 U.S. 331 (1898), as a case in

which an official was not a “principal officer” requiring confirmation. Eaton upheld the position

of “vice consul”— a designated State Department employee stationed in an overseas mission. Id.

at 337. Congress defined the vice consul’s responsibilities as temporarily performing the

responsibilities of the consul-general while the latter was sick or absent, or until a replacement

arrived if the consul-general died. The vice consul had two principal officers as superiors. His

actions were subject to reversal when the Senate-confirmed consul-general returned to service, or

by the replacement official if the consul-general died. The vice consul also reported to, and was

subject to replacement by, the Secretary of State. Id. at 339.

The vice consul was not a Senate-confirmed officer. The Supreme Court in Eaton therefore

considered two questions. First, the issue addressed in Edmond: Was the “vice consul” a “principal

officer” rather than a mere subordinate? Second, in any event, does the Constitution categorically

require confirmation whenever even a subordinate exercises the powers of the principal? The

Court held that the answer to both questions was “no,” such that the vice consul need not be


6

confirmed. It reasoned that (1) the vice consul was a “subordinate” position; and (2) confirmation

was not required because the vice consul exercised the powers of the principal officer only for a

“limited time” in response to “temporary and special conditions.” 169 U.S. at 343-44; see also id.

at 343 (a “principal officer” “does not embrace a subordinate and temporary officer like that of

vice-consul as defined in the statute” (emphases added)).

First, the Court held that the vice consul was “a mere subordinate official.” 169 U.S. at

344. The Court looked to the job requirements: “The manifest purpose of Congress in classifying

and defining the grades of consular offices, in the statute to which we have referred, was to so limit

the period of duty to be performed by the vice-consuls and thereby to deprive them of the character

of consuls in the broader and more permanent sense of the word.” Id. at 343. The vice-consul’s

principal responsibility was to serve only during the consul-general’s absence, and the consul-

general could of course reverse any decision of the vice-consul on his return, as could the Secretary

of State at any time. Vice consuls were accordingly “subordinate officers who were to represent

the principals in case of absence.” Id. at 336; see also id. (“subordinate and temporary officer”

who would “exercise such authority” of the principal “when the lawful occasion for the

performance of the duty arose”).

The vice consul was thus merely a previously designated person who could be “called upon

to discharge the duties” of the consul-general in an exigency. 169 U.S. at 340. Indeed, the State

Department rejected Eaton’s use of the title “acting consul-general,” specifying that he was instead

the “vice-consul-general” temporarily exercising the authority of the consul-general. Id. at 333.

Second, the Supreme Court separately addressed whether even a subordinate becomes ipso

facto a principal officer merely by exercising the principal’s authority. See 169 U.S. at 333

(addressing “[t]he claim that Congress was without power to vest in the President the appointment


7

of a subordinate officer, to be charged with the duty of temporarily performing the functions of

the consular office”). The Court held that performance of the principal’s responsibilities did not

always require confirmation. It reasoned that a subordinate must be able to perform the functions

of a principal officer in limited circumstances, because otherwise it would be impossible for the

government to perform its statutorily assigned responsibilities:

Because the subordinate officer is charged with the performance of the duty of the superior for a limited time and under special and temporary conditions, he is not thereby transformed into the superior and permanent official. To so hold would render void any and every delegation of power to an inferior to perform under any circumstances or exigency the duties of a superior officer, and the discharge of administrative duties would be seriously hindered.

Id.

The temporary and special conditions that limited when the vice consul would perform the

consul-general’s duties were plain from the governing statute. “The manifest object of the

provision was to prevent the continued performance of consular duties from being interrupted by

any temporary cause, such as absence, sickness or even during an interregnum caused by death

and before an incumbent could be appointed.” 169 U.S. at 339; see also id. (Congress secured “an

unbroken performance of consular duties by creating the necessary machinery to have within reach

one qualified to perform them, free from any vicissitude which might befall” the consul-general.).

The position was necessary “to guard against [the] contingency” that the “public interest must

inevitably suffer in consequence of the closing of the consular office.” Id. at 342. “This was

secured by the designation in advance of a subordinate and temporary official who, in the event of

happening of the foregoing conditions, would be present to discharge the duties.” Id. at 339.

B. The President’s Appointment of Matthew Whitaker Violated the Appointments Clause.

The Government’s argument that Mr. Whitaker’s appointment is constitutional requires

this Court to collapse the holding of Eaton (and Edmond as well) into a single question: Is the


8

appointment “temporary”? By that, the Government means: Will the officer be replaced some

day? But that of course makes the Appointments Clause effectively a dead letter, because it

permits the President to make any appointment without Senate confirmation in any circumstances,

including when the President creates the vacancy. The President need only intone that the

appointment is “temporary,” in the sense that the official will eventually be replaced—even many

months later. Indeed, that official could be replaced by another “temporary” official. That is not

hyperbole. The Opinion of the Office of Legal Counsel approving Mr. Whitaker’s appointment

asserts that the only requirement of the Appointments Clause is that the President formally

designate the official’s service as “temporary.” See Memorandum for Emmet T. Flood, Counsel

to the President, from Steven A. Engel, Assistant Attorney General, Office of Legal Counsel, Re:

Designating an Acting Attorney General at 15 (Nov. 14, 2018) (2018 OLC Opinion), attached to

[fill in].

The officials that can serve as Acting Attorney General under the Supreme Court’s

decisions in Edmond and Eaton are those specified by Congress under the AG Act: the Deputy

Attorney General; and if the Deputy cannot serve, the Associate Attorney General and other

designated officials. Even if those officers were not confirmed by the Senate, they would be

“subordinates” because Congress designed their job so that they report to the Attorney General.

Further, the offices of those officials are classified and defined to perform the duties of the

Attorney General only in response to temporary and special conditions—generally the Attorney

General’s sickness or absence. In every circumstance, their service is necessary for the “unbroken”

performance of the Attorney General’s responsibilities. Indeed, the Senate confirmed them in the

knowledge that they would be called upon if the Attorney General was unavailable.


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The officials designated by the AG Act are thus the equivalent of the vice-consul in Eaton.

But according to the Government, the Supreme Court in that case would equally have upheld an

order of the President firing a consul-general and replacing him indefinitely with an ad hoc, hand-

picked official—for example, the President’s personal acquaintance, the consul-general’s personal

secretary. That is not a reasonable reading of the decision, because it renders all of the Supreme

Court’s reasoning meaningless.

For the reasons that follow, the Government’s argument that the Appointments Clause

equally permits the President to appoint Mr. Whitaker lack merit.

1. Mr. Whitaker Is Serving as a Principal Officer, Not a Subordinate.

Under the Appointments Clause, a principal officer is one who has no “superior”—the

officer’s work is not “directed and supervised at some level by” a principal officer. Edmond, 520

U.S. at 651. The inquiry is: How did Congress “classif[y] and define[]” the position? Eaton, 169

U.S. at 343. In Edmond, the civilian judges of the military court of criminal appeals were not

principal officers because their work was overseen by the Judge Advocate General and, in turn,

the Secretary of Transportation. Id. at 664. In Eaton, the vice consul was overseen by the consul-

general and (even if the consul-general had died) the Secretary of State. 169 U.S. at 339. Indeed,

the Secretary of State took care to ensure that such an official held himself out as the “vice consul-

general,” not the “acting consul-general.” Id. at 333.

No part of Matthew Whitaker’s position as Acting Attorney General was “classif[ied] and

defin[ed],” Eaton, 169 U.S. at 343, to ever involve any oversight by any principal officer. He

reports directly to the President, and only to the President. There never will be a day in which any

principal officer can tell him what to do, or remove him if he refuses.

There is in fact no substantive difference between what Mr. Whitaker does every day in his

position and what a permanent Senate-confirmed Attorney General will do. Mr. Whitaker


10

exercises all of the powers of the Attorney General and bears all of that office’s responsibilities.

He is never exercising those powers on behalf of some other Senate-confirmed official, in

anticipation of that official’s return. He is no longer serving as Chief of Staff, but rather has named

a replacement.

The fact that Mr. Whitaker will never be supervised is a critical distinction. If Mr. Whitaker

is not a “principal officer,” then no non-confirmed person exercising all the powers of a principal

officer ever is, if they serve for less than the maximum period under the Vacancies Act. To be

sure, even those officials who serve as Acting Attorney General under the AG Act may not be

supervised by a principal official during a vacancy. But their jobs are defined so as to always

remain subject to that supervision. The Senate also confirmed those officers in an expectation that

they might perform the Attorney General’s functions. Further, they continue to hold their other,

subordinate positions. For example, the Deputy Attorney General remains in that position while

serving as Acting Attorney General; no other official takes on the Deputy’s role.

2. Even If Mr. Whitaker Is an “Inferior Officer,” His Performance of the Attorney General’s Responsibilities Was Not Necessitated by “Temporary and Special Conditions.”

The Government argues that it is sufficient under the Appointments Clause that Mr.

Whitaker merely serve “temporarily.” But even putting to the side that he is not a subordinate, see

Part I-A-1, supra, the Supreme Court in Eaton held that it was not sufficient that the appointee’s

service be “for a limited time.” 169 U.S. at 343. It concluded that the Appointments Clause

requires the confirmation of an otherwise subordinate officer whose job responsibilities were not

limited to “the performance of the duty of the superior for a limited time and under special and

temporary conditions. Id. (emphasis added). In Eaton itself, the vice consul served during the

consul-general’s absence, sickness or death. The Supreme Court recognized that Congress found


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it was necessary to designate a vice consul in advance to provide for the “unbroken” operations of

the consul. Id.

The Government’s argument that the appointee’s service need only be “temporary” also

bears no relationship to the Supreme Court’s reasoning in Eaton. There, the Court refused to read

the Constitution in a way that would make it impossible to ever delegate the responsibilities of a

principal officer. Approving every nominally “temporary” appointment goes vastly further and

makes the Appointments Clause essentially meaningless.

The Government notably does not even argue that Mr. Whitaker’s position is a response to

any special condition. He never was designated to serve—by either Congress or the President—

when the Attorney General was sick or absent. Rather, the President affirmatively forced out the

Attorney General. He did so after significant planning. Further, given the availability of the

officials designated by Congress in the AG Act, it was not necessary to appoint anyone else to

ensure the Department’s unbroken operations. To the contrary, the President “broke” the

predetermined line of succession.

Indeed, the President claims the authority to name as Acting Attorney General any GS-15

or above in the Department of Justice (more than 6,000 lawyers) or any Senate-confirmed official

from any department (of which there are more than 1,200). Mr. Whitaker was the Attorney

General’s chief of staff. Traditionally, that position involves no substantive portfolio or direct line

of authority over the Department’s more than 110,000 employees.2

2 It is also relevant—but not decisive—that the vice consul in Eaton and the Senate-confirmed officials identified by the AG Act are designated in advance. Mr. Whitaker was not. That characteristic makes it much less likely that the President can evade the Appointments Clause by appointing an ad hoc official to serve his own particular needs in the moment, rather than the interests of the Department as a whole.


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